How to Invest in Shopping Centers. Shopping centers are a good investment if you are looking for cash flow or diversification from the stock market. Real estate investments typically produce regular rent payments that can be used as income or to pay down debt. They tend to appreciate independently of the stock market, allowing diversified investors to profit even when the market is down.
Buy shares of a real estate investment trust (REIT). A REIT is publicly traded stock in a company that owns real estate properties. By analogy, a REIT is to real estate as a mutual fund is to the stock market. Some REITs specialize in the management of shopping centers including: Acadia Realty Trust, CBL and Associates Properties, Federal Realty Investment Trust, and General Growth Properties.
Invest in even more specialized REITs if you find a niche that is going to take off. For example, buy French REIT Unibail for European exposure or Tanger Factory Outlet Centers if you think outlet shopping is the next big thing.
Trust a mutual fund manager with your money if you aren't up to date on real estate trends. Fidelity manages real estate funds and iShares offers exchange traded real estate index funds.
Join a syndicate of real estate investors. A syndicate is similar to a REIT, although it is on a smaller scale and organized differently. Syndicates usually have high minimum investments, so they are not for everyone.
Purchase a shopping center yourself. Investing on your own requires a significant capital investment plus cash reserves to pay for repairs and management expenses. If you have the resources and access to good advice, direct investments have the potential to yield exceptional profits.
REITs usually pay dividends on a quarterly basis. Although there is the potential for capital appreciation, most of your return on investment will probably come from dividend income.